OPEN APP
Home >Budget 2019 >News >Govt likely to set up DFIs to meet infra funding needs

Govt likely to set up DFIs to meet infra funding needs

The budget, to be presented by Sitharaman on 1 February, is expected to focus on reviving the economy following the massive slowdown due to the covid-19 outbreak and the 68-day stringent nationwide lockdown from 25 March.Premium
The budget, to be presented by Sitharaman on 1 February, is expected to focus on reviving the economy following the massive slowdown due to the covid-19 outbreak and the 68-day stringent nationwide lockdown from 25 March.

Merging existing entities is likely to be announced in the Union budget 2021-22 to meet long-term funding needs of new, stalled and under-construction infrastructure projects worth over 100 trillion

The creation of a mega development finance institution (DFI) by merging existing entities is likely to be announced in the Union budget 2021-22 to meet long-term funding needs of new, stalled and under-construction infrastructure projects worth over 100 trillion, two people aware of the development said, requesting anonymity.

A large DFI is necessary for rapid infrastructure development, which in turn will help put India on a higher growth trajectory, as it would have a cascading effect on all sectors of the economy, they added.

Also Read | What 2020 did to India’s inequality

The budget, to be presented by finance minister Nirmala Sitharaman on 1 February, is expected to focus on reviving the economy following the massive slowdown due to the covid-19 outbreak and the 68-day stringent nationwide lockdown from 25 March.

There is a need for a mega DFI as commercial banks are not suited for long-term financing of infrastructure projects with very long gestation periods, the people cited above said, adding that such an institution could also help revive stalled projects worth 10 trillion.

“Most of these projects are languishing because of a fund crunch," one of the two people, a government official, said. The proposed mega DFI “which may include an existing financial institution and some existing funds will meet the long-term financing need of these projects," he added.

Subscribe to Mint Newsletters
* Enter a valid email
* Thank you for subscribing to our newsletter.

Never miss a story! Stay connected and informed with Mint. Download our App Now!!

Close
×
Edit Profile
My ReadsRedeem a Gift CardLogout